Wackynomics
Why is it that when politicians want to pass a piece of legislation that is controversial or that is a pet project, they always seem to throw basic economic principles such as supply and demand out the window? Or that they think they can manipulate market forces to their will?
This seems to be the case with the health care proposal in Congress and supported by President Obama.
They want everyone to have health insurance. It's a noble desire enough, but they should make a few changes to the system before they decide to create and entirely new one. For instance, competition lowers prices. The federal government should mandate that we can buy health insurance from whatever state is the cheapest. For example, if New Mexico has the cheapest rates in the country, then we should be able to buy health insurance in New Mexico at that price, but since we live in Illinois we have to pay Illinois premiums. Also, prevent illegal citizens from utilizing and draining the system of resources. This is why some hospitals have had to shut down in California.
The current federal proposal in the Senate would tax your employer provided health benefits (unless you're a union member - your benefits are exempt) and levy a fine of $1000 if you refuse to get health insurance. Congress and the President claim that with the government in the health insurance game that prices will fall because of competition from the government will pressure health insurance companies to lower their prices.
In what world?!?!?!
Currently, if you own a vehicle you are required by law to own car insurance or face a $500 fine if caught without it. Riddle me this - has your car insurance premium gone down or up?
The government's economic belief of trying to inflate demand artificially through coercion is flawed because of the above example. Furthermore, the government has monopoly power because of their endless pockets puts private business at a massive disadvantage. Monopolies are price setters, not price takers and therefore they can artificially push rates down - but it's temporary. As a result, private business must go with the monopolists prices if they wish to stay in business.
However, what happens when the market dries up or otherwise known as demand? Where is the incentive to keep your health insurance rates low because attracting new customers is also a factor in lower prices.
Here's the answer. The government will tell the health insurance companies what rates they can charge. Of course, those low rates will only be temporary because the new health insurance entitlement will need a new bureaucracy to be created to facilitate the government intrusion into another private business sector. Your life will become a cost-benefit analysis so get ready to die without treatment if you have late-stage anything, especially if this health program is run like England's system. If you run into anyone from Canada, ask them how much they love (sarcasm) their system up in the Great White North. Private health insurance companies will go out of business and the government program will expand (as will costs). The ideological left has no problem with this happening because it would mean more people relying on government and an unstoppable campaign issue - any cuts or changes to the program would bring weeping and gnashing of teeth and outcries of hurting the poor, children and elderly.
Government should stay out of business because their economic model just doesn't fit when supply and demand is factored in (which they don't want to include). The government has monopolistic power in the marketplace which is unfair and not conducive to competition and therefore prices. The car insurance industry is a good example of how market manipulation has not helped with keeping prices low.
How many more sectors of the economy is the government going to get itself involved in? Its already in the car industry, the financial industry, energy industry, and now the health industry. Before we know it, our free-market capitalist economy will be like the socialist democracies of the European Union.
"Socialism is fine until you run out of other people's money" - Margaret Thatcher
This seems to be the case with the health care proposal in Congress and supported by President Obama.
They want everyone to have health insurance. It's a noble desire enough, but they should make a few changes to the system before they decide to create and entirely new one. For instance, competition lowers prices. The federal government should mandate that we can buy health insurance from whatever state is the cheapest. For example, if New Mexico has the cheapest rates in the country, then we should be able to buy health insurance in New Mexico at that price, but since we live in Illinois we have to pay Illinois premiums. Also, prevent illegal citizens from utilizing and draining the system of resources. This is why some hospitals have had to shut down in California.
The current federal proposal in the Senate would tax your employer provided health benefits (unless you're a union member - your benefits are exempt) and levy a fine of $1000 if you refuse to get health insurance. Congress and the President claim that with the government in the health insurance game that prices will fall because of competition from the government will pressure health insurance companies to lower their prices.
In what world?!?!?!
Currently, if you own a vehicle you are required by law to own car insurance or face a $500 fine if caught without it. Riddle me this - has your car insurance premium gone down or up?
The government's economic belief of trying to inflate demand artificially through coercion is flawed because of the above example. Furthermore, the government has monopoly power because of their endless pockets puts private business at a massive disadvantage. Monopolies are price setters, not price takers and therefore they can artificially push rates down - but it's temporary. As a result, private business must go with the monopolists prices if they wish to stay in business.
However, what happens when the market dries up or otherwise known as demand? Where is the incentive to keep your health insurance rates low because attracting new customers is also a factor in lower prices.
Here's the answer. The government will tell the health insurance companies what rates they can charge. Of course, those low rates will only be temporary because the new health insurance entitlement will need a new bureaucracy to be created to facilitate the government intrusion into another private business sector. Your life will become a cost-benefit analysis so get ready to die without treatment if you have late-stage anything, especially if this health program is run like England's system. If you run into anyone from Canada, ask them how much they love (sarcasm) their system up in the Great White North. Private health insurance companies will go out of business and the government program will expand (as will costs). The ideological left has no problem with this happening because it would mean more people relying on government and an unstoppable campaign issue - any cuts or changes to the program would bring weeping and gnashing of teeth and outcries of hurting the poor, children and elderly.
Government should stay out of business because their economic model just doesn't fit when supply and demand is factored in (which they don't want to include). The government has monopolistic power in the marketplace which is unfair and not conducive to competition and therefore prices. The car insurance industry is a good example of how market manipulation has not helped with keeping prices low.
How many more sectors of the economy is the government going to get itself involved in? Its already in the car industry, the financial industry, energy industry, and now the health industry. Before we know it, our free-market capitalist economy will be like the socialist democracies of the European Union.
"Socialism is fine until you run out of other people's money" - Margaret Thatcher
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